Nigeria’s Federal Government to sell shares in Galaxy Backbone

Mergers, Acquisitions and Financial Results

Plans are underway by the Federal Government to sell stakes in Galaxy Backbone Plc, but Government will still retain a strategic hold on the government-owned infrastructure service provider for security and national interest reasons, according to CEO of the company, Gerald Ilukwe.

Set up as a partnership between government and private sector by the administration of ex-President Olusegun Obasanjo, Galaxy Backbone Plc is owned 51 per cent by the Federal Government and the Jigawa State Government and 49 per cent by private stakeholders.

Jigawa's stake comes from its assets and consideration of the state-government owned Galaxy Information Technology and Telecommunications Limited.

Ilukwe who dropped the hint weekend during a media briefing when officials of the company gave an update on its activities saying Galaxy Backbone is on track in its mandate in key areas including building and managing a consolidated government network using available infrastructure to provide transversal services and solutions to the Government; extending its expertise to the private sector by offering superior services and solutions at competitive prices and realizing one of the Millennium Development Goals of breaking frontiers by bridging the digital divide and providing access and relevant solutions to provincial communities.

Additionally, the company was also set up to ensure a secure communication platform for the public sector by building and operating a single nation-wide IP (internet protocol) broadband network to provide network services to all Federal Government ministries, departments and agencies.

"If you tried to sell Galaxy when it was registered, how much will you get for it? What does it mean to anybody? It's a paper company. Galaxy acquires value, shows proof of ability and within the shortest possible time, in fact we are somewhere behind in terms of timeline because we have not moved as fast as expected, we will begin to actually sell our shares", he added.

He adds that the company would evolve into a public-private-partnership (PPP) in which "Government expects to sell a significant amount of shares in this company. Government will not privatise the entire company because it is a provider of services to government and therefore government has to maintain a certain shareholding for security and national interest reasons."

Iluwke explains that the setting up of the company "was not just somebody's flight of fancy" as it was borne out of the recommendation of a Technical Committee on Harmonisation of ICT Initiatives which specifically sought the creation of a National Infrastructure Backbone. According to the report, against the backdrop of diverse public sector IT initiatives and the need to optimise their cost and functional benefits to the government and people of Nigeria, there was a need to harmonise ICT initiatives in government."Following that need and the second reason was the fact that and still remains a valid fact is that a lot of the places that this backbone is going to go, Nigeria's borders have remained relatively unchanged except for Bakassi for how many years, is that the private sector would not have found those locations viable. So they would not have invested.

But those locations all fall within Nigeria and all fall within the purview of government to ensure uniform development across the nation because the digital divide does not only exist among nations but it exists within nations", he adds.Galaxy Backbone says it has built an installed and available capacity of 30 terabytes to support storage for the public and private sector and build a national backbone to particularly serve rural communities.Adding further, Chief Marketing Officer, Galaxy Backbone, Yusuf Kazaure, says beyond public sector agencies, the company has been receiving requests from private sector end users and service providers to co-locate their facility within its data storage centre.Explaining further, Kazaure says, "one of our mandates, one of the core reasons for being set up, according to the report of the technical committee on the harmonisation of government ICT initiatives, we are supposed to take over, part of the assets used to set up Galaxy Backbone are existing infrastructure and connectivity infrastructure owned by various different government agencies, departments and initiatives as well and ongoing initiatives."

So, by that fact, it means government has decided to cede off that aspect of its asset to Galaxy Backbone, so there is a vacuum now created within government immediately by doing that. So we are supposed to take over those assets, integrate them, harmonise them together with the new initiatives and come back to government. So they are not being serviced technically by doing this unless we come to the fore to do this. So when you look at it from this point of view, you'll see that we are best placed technically and best placed to be able to address that need."The company says it has bandwidth (transmission capacity) to service needs for Internet access via VSAT and is also procuring capacity off the SAT-3 submarine optical fibre link managed locally by NITEL to be able to retail SAT-3 for government."And again, these are services you procure on the basis of need and within our capability to be able to for instance put in a fibre connection between yourself and NITEL which is the sole provider of SAT-3. And that is upgradable to typical STM-1 which is like 155 Megabit capacity that would service the needs and then as we begin to bring people on board, we can scale smoothly to meet the needs.

And then, all that as well is driven by our plans to have a substantive network operating centre and a local teleport where the facilities that you have seen will defer to more like a disaster recovery business continuity site.So, it is all in our growth plan and business model to be service provider to government and being able to leverage a national backbone network to serve rural communities and so on", says Innocent Ngogbehei of the Technical Services Division of Galaxy Backbone. Against the backdrop of plans by NITDA, the National IT Implementing Agency, to roll out 100 ATMs, which analysts reckon is within the mandate of Galaxy Backbone, its CEO says , "I am not in a position to comment on stories that come out of the pages of newspapers knowing that the DG of NITDA was Chairman of the recently dissolved Board of Galaxy Backbone and is aware of the mandate of Galaxy Backbone and if there are any differences in opinion, they are not official.

I am sure he is responsible enough not to do anything that will contravene the mandate of Galaxy Backbone." According to Ilukwe, "But like I said, it is just something I read just like you read it. I was not there when they signed this MoU to roll ATMs. There is a simple way we also put it: it's a government infrastructure. If NITDA decides to roll out or to be involved in the rollout of infrastructure, we also have to understand the limits of our own mandate, if NITDA got involved with a bank in the rolling out infrastructure with the bank's money, it's really not anybody's business.

But insofar as NITDA, I believe I understand them or the mandate, is that Galaxy Backbone is responsible for rolling out all government infrastructure. If what NITDA is doing is true, as reported in the papers, is outside of the framework of government, I guess I am not in a position to be telling them what to do. But if it is within the framework of government, then it has to be in compliance with the mandate. But again, it is just an MoU and MoUs are not what people tend to lose sleep over but then there have been MoUs that have not seen the light of the day."

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